PROJECT SUMMARY Transposable elements (TEs) make up more than half of the human genome, and their transposition and rearrangement have been directly implicated in causing more than 100 genetic diseases. Because of these mutagenic properties, TEs are important drivers of genetic variation between and within species. TE activity accounts for most of the DNA that is unique to each mammal species, and is responsible for as much as 30% of structural genomic variation within the human population. However how this enormous source of genetic variation impacts the evolution and physiology of species remains poorly understood. This project is designed to yield transformative insights into the biological significance of TEs in evolution and disease. The central hypothesis tested in this proposal is that prefabricated regulatory and coding activities ancestrally encoded by TEs have been co-opted repeatedly during vertebrate evolution to promote the emergence of new cellular functions. At the regulatory level, we will deploy innovative computational and experimental approaches to test the hypothesis that polymorphic and lineage-specific TEs make a substantial contribution to transcriptomic and cis-regulatory variation within humans and across a diverse set of mammal species, including primates, rodents and bats, with an emphasis on the origin and turnover of long noncoding RNA repertoires. Furthermore, we will investigate the role of TEs in the regulatory evolution of a major component of the innate immune system, the interferon response. Experimental manipulations in cell lines, including genome editing and functional assays, will be used to validate the functional significance of TE-derived regulatory sequences. At the protein-coding level, we will combine evolutionary sequence analysis and functional assays to characterize several TE-derived genes co-opted for cellular function in the human genome. Notably we will test the hypothesis that envelope proteins derived from endogenous retroviruses are capable of protecting cells from retroviral infection. We will also investigate several domesticated transposases involved in brain function and development. Together the outcomes of this proposal are anticipated to shift the perception of TEs from inert molecular fossils to active contributors to the evolutionary plasticity of vertebrate genomes. In addition, our studies are bound to reveal crucial new insights into the role of mobile genetic elements in promoting disease states, including cancer, autoimmunity, and neurodevelopmental disorders.